How to add a pre-tax, after-tax (post tax), reduction or Deduction to an employee record

If you need to setup a pre-tax, after-tax, reduction, or deduction to an employee record below will explain how to complete these steps. This can be used to reduce the amount of pay that the employee is going to receive in their paycheck. This method can also be used to take money back for overpayments. They are most commonly used to reduce the amount of pay for benefits that are provided, such as a 401K.

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Number:40534

Products:

Payroll

Navigate to Payroll > Configuration > Deductions.

Click the down arrow and select New Pre-tax Deduction or New After-tax Deduction.

If you selected Total Amount or Amount per period on the Deduction tab, you can select filters to define the which employees the deduction can be added in the This deduction can only be assigned to employees with these characteristics grid.

If you selected Percentage of gross pay, Percentage of net pay, or Percentage of disposable income on the Deduction tab, you can select the pay types to include in the Include these pay types in [option] grid.

On the GL Distribution tab select:

Combine employee distribution with this account code to enter the account code to use for calculations. When creating calculations, the account code is combined with the employees masked account number to create the distribution.

Always credit this account to use the same account for all calculations.

Note: The Combine employee distribution with this account code option paired with the Always use this transaction distribution grid, can cause calculation errors that are difficult to track. Ensure you define all characteristics for fund journal entries that will use this distribution We recommend using the Always credit this account option.